MARKET DEVELOPMENT
VEGOILS-Palm jumps as Ukraine war, Argentina strike worsen supply woes
VEGOILS-Palm jumps as Ukraine war, Argentina strike worsen supply woes
14.04.2022 (www.nasdaq.com) - By Mei Mei Chu
KUALA LUMPUR, April 14 (Reuters) - Malaysian palm oil futures rallied 3% on Thursday, as the Argentina trucker strike threatens to hammer a tight global edible oil market that is already squeezed by the Russian-Ukraine conflict.
The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange gained 195 ringgit, or 3.18%, to 6,330 ringgit ($1,497.87) a tonne by the midday break. The contract gained for a fourth session in five.
Overall vegetable oil and grains complex jumped, given the structural demand problem and the supply constraints at destinations and at origins, said Marcello Cultrera, institutional sales manager & broker at Phillip Futures in Kuala Lumpur
"Physical buyers are facing increasing challenges sourcing and subscribing feedstock requirements given the past two years of supply chain disruptions, inflation cost and endemic supply shocks," he added.
Argentine grain-truck drivers, industry groups and government officials failed to make a breakthrough in talks on Wednesday to end a strike, threatening to 'severely harm' exporters in the world's top shipper of processed soy.
India's palm oil imports jumped 18.7% in March from the previous month, as traders moved to secure alternatives to sunflower oil that can no longer be bought from Ukraine due to the war, a leading trade body said on Wednesday.
Soyoil prices on the Chicago Board of Trade BOcv1 were up 1%, extending an overnight gain of 3.5%. Dalian's most-active soyoil contract DBYcv1 rose 1.8%, while its palm oil contract DCPcv1 gained 3.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may test a resistance at 6,326 ringgit a tonne, a break above could lead to a gain into the range of 6,454 ringgit to 6,548 ringgit, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.2260 ringgit)
(Reporting by Mei Mei Chu; Editing by Rashmi Aich and Sherry Jacob-Phillips)